THEME FOUR-ECONOMIC EMPOWERMENT

HOW CAN IFAD BUILD PRIVATE SECTOR INVOLVEMENT MORE ACTIVELY INTO PROJECTS IT SUPPORTS?

• CAPACITY BUILDING:– For entrepreneurship and regular wage employment– Loan based model for skill development for wage employment– Improving employability – Employment guarantee based on skill of the entrepreneur – Train NGO’s as value chain service providers-BDS

• MARKET LINKAGES:– Buy back services /contract farming/collaborative farming/Producer

organisations– Direct sourcing from farm gate– Market intelligence – Leveraging supply chain

• PROMOTION – Aggregation– Standardization and Quality control – Branding

• INSTITUTION BUILDING AND REGULATORY ENVIRONMENT– Producer companies /Federation of SHGs or other

community based organizations

• TECHNOLOGY SUPPORT – Product Development– Design development– Patenting/G.I/Statutory licenses i.e. FPO,AGMARK etc– Knowledge Management –extension support

• INVESTMENT– Co –investment ( seed capital/incubation fund)– Partners in the value chain

CAN PRIVATE CORPORATE SECTOR REPLACE GOVERNMENT’S AGENCIES IN TERMS OF PROJECT MANAGEMENT ARRANGEMENT ?

• Is the private sector really interested?( Business Vs CSR)• Government have its own domain while the private sector

have its own domain ( Market).• Facilitator role for the Government and business

development role for the private sector.

What are some of the remaining challenges that needs to be addressed in ensured rural poor can achieve better incomes and gain economic empowerment on a sustainable basis? What are expected benefits to the rural poor? What are the expected benefits to the rural poor? What are the safeguards required, if any?

Challenges:– Difficulty in Leveraging Rural Credit from bank

• High levels of financial exclusion/ high interest on borrowings • Loan goes to large farmers• SHG’s are under financed

– Risk Mitigation – natural calamities/ market risks– Venture funding opportunities limited– Access to Business Development Services– Management of Enterprises – Knowledge Management regarding Diversification of livelihood

portfolio

Benefits

• Increase Margins• Cost cutting • Risk diversification• Economy of scale through aggregation • Value addition• Sequencing the process

Safeguards Required

• Convergence Management.• Advocacy on livelihood opportunities/BDS • Confidence Building with community • Participatory outcome based Monitoring. • Hand holding /Mentoring services • Selection of partners which are sensitive to

rural poor

Should IFAD play a more active role in the mainstreaming of micro finance in India and should the development of a wider range of micro finance products be part of IFAD’s programme going forward?

• IFAD need to have a Integrated approach for microfinance.• Shift from Micro credit to Micro finance-Venture funding –

Micro Insurance. • Design credit based products rather than grant products –

long term sustainability to be ensured.• Diversification of credit based products.• Community based Risk Mitigation• Enhance Seed Capital infusion to SHG’smicro enterprises.• Networking of SHG Federations/ Farmers’ clubs for micro

finance